A Case Study on Globalization's Reach into North Korea
In order to see how the context surrounding Kaesong's development has changed in the wake of world shaping events such as 9/11 in 2001, the subsequent "War on Terror" across the Gap, and North Korea's admitted nuclear programs, it is necessary to first benchmark the regional environment at the time of the industrial complex's inception.
Economic Flows
There were several interesting economic statistics by the end of 2000 regarding flows to and from North Korea via the rest of Northeast Asia. Here are some of the highlights:
- Total volume of inter-Korean trade stood at $425.15 million, an increase of $90 million from 1999
- That volume accounted for 0.6% of South Korea's total trade
- That volume accounted for 22.5% of North Korea's total trade
- Trade surplus for North Korea with South Korea was around $50m in 2000 (excluding aid and development projects)
- Processing-on-commission trade accounted for 53.5% of total trade between North and South
- Processing-on-commission trade involved almost 140 companies
- Interest by South Korean firms centered on Mt. Kumgang tourism and manufacture of textiles, footwear and electronics
Political Flows
The Kim Dae-jung government had adopted the "Sunshine Policy" of engagement toward the North and promoted its vision of building a national economic community through active inter-Korean economic cooperation. This engagement had begun with the June 15 Joint Declaration, which envisioned the balanced development of the North and the South. Shortly thereafter, Kim was graced by the presence of US Secretary of State Madeleine Albright. However, even at the time of this wave of diplomacy, North Korea was sticking to its militant antiforeign, anticapitalist values and ideas, which had guided its external policy since its founding (Eliot Kang, pg 282).
Obviously, at this time, political relations remained strongest with China despite the fact that the strong economic and people flows across China's borders had already started to gradually pull its political positioning further away from the often belligerant and irrational political positions of North Korea. Essentially, North Korea has been in constant conflict with itself in order survive in an ever interdependent world while trying to uphold the juche philosophy espoused by its leadership (Eliot Kang, pg 295).
Security Flows
More than any other Northeast Asian power, North Korea is confronted with the geographical reality of a security complex that defines the region more than does anything else (Eliot Kang, pg 281). Along with South Korea, North Korea occupies a geopolitical space that is the pivot of Northeast Asian security, creating the most important strategic nexus of the Asia-Pacific, where four of the greatest powers in the world system--the United States, Japan, China and Russia--meet and interact (Eliot Kang, pg 283). The fact is that the Korean peninsula is now the most militarized geographical space in the world (Eliot Kang, pg 283).
An in-depth look at the opposing security forces in the region can be found here for the United States and South Korea and here for North Korea. Basically, security flows stop at North Korean borders--with an unknown number of exchanges with perhaps China and Russia. In 2000, North Korea signed with Russia a renegotiated friendship treaty, though without the provisions for ideological solidarity and security guarantees; China had remained a security guarantor of North Korea, but not to the level of the South Korea-US relationship (Eliot Kang, pg 285-286).
Notice the map at the left illustrates the Kaesong region as an avenue for military approaches into South Korea. (In regards to private sector logistics, the best rule-of-thumb in Gap states is to follow local or regional military logistics routes when possible--they usually will have already scouted out the best avenues and areas for building a fledgling supply chain).
People Flows
In early 2001, people flows across North Korea's borders from the rest of Northeast Asia were still insignificant, and mostly limited to Chinese tourists. When these flows did occur, the stories were often of Kim Jong-Il and his train rides to China or North Koreans escaping from its living conditions to find asylum through embassy break-ins. The Aquariums of Pyongyang is a book that illustrates the underground nature and difficulties of this process. Needless to say, there had never been many people who desired to get into North Korea. Around this time however, South Korea had begun to organize tours to Mt. Kumgang with the cooperation of North Korea (as mentioned in economic flows) and allow strictly controlled family meetings.
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